Aztec Corp. v. Tubular Steel, Inc.

Tubular Steel, Inc. (Tubular) (plaintiff) distributed steel pipes. Tubular received an order for pipe from Peabody with precise specifications, including long thread and accompanying certificates of the pipe’s composition. Tubular ordered the pipe from Aztec Corp. (defendant), specifying the particulars and deadline required by Peabody. Tubular’s order was documented in a purchase order. Tubular wire-transferred the contract price of $64,739 to Aztec. The pipe that arrived at the designated shipping port, however, did not meet Peabody’s specifications and Tubular’s order. The pipe was not correctly threaded and was unaccompanied by certificates. Tubular rejected the goods and was unable to resell them. Aztec refused to refund the contract price. According to Tubular, it also incurred an extra $2,586 to obtain substitute goods (“cover”) and $3,400 in incidental expenses to deal with the nonconforming goods. Tubular sued Aztec, seeking the price it paid to Aztec and cost of cover and incidental expenses. In a jury trial, it was uncontroverted that the contract price had been $64,739. Tubular also presented witness testimony and documentary evidence to support its additional costs. The jury found that there was a contract between Tubular and Aztec, under which Aztec delivered nonconforming goods and caused Tubular damages. The jury awarded Tubular $35,000 in damages. Aztec appealed, arguing that Tubular should have mitigated damages by rethreading the pipe.